L'Oréal in China

Eyeing the growing affluence of Chinese consumers, global beauty giant L'Oréal is implementing a major marketing strategy to increase sales in that country by at least 10% during 2013. It purchased local brand Yue Sai in 2004 and has expanded retail coverage to reach more shoppers in more Chinese markets and introduce its other brands, not only in the largest cities but in smaller cities around the country.

With market segmentation, L'Oréal is using a differentiation strategy to target specific segments. The CEO for China states: 'You have to have an answer for very different needs'. In other words, one beauty brand or product does not fit all.

That's why L'Oréal has specialised product development programmes in place, as well as retail marketing elements geared to the buying patterns of Chinese consumers.

Because beauty products are aspirational, internationally-known celebrities like Emma Watson and local superstars like Fan Bingbing and Andy Lau add cachet to the firm's Chinese promotions.

And if you think the company is targeting only women, think again. As in other parts of the world, L'Oréal is also targeting men who buy skin-care products and other personal care items. 'We estimate that the men's cosmetics sector has grown at twice the rate of the total beauty market in China', says the chief executive.

Leveraging its French luxury image, L'Oréal is now ranked as the second-most valuable beauty brand in the world (behind Olay, owned by rival Procter & Gamble).